This is the 2nd installment in our series: We Told You So! where we show prominent individuals, institutions, and media sources just now noticing what we’ve been saying all along.

In a previous post we discussed why democratization will fail in the Middle East – and explained that for a democracy to properly function there first needs to develop a vibrant civil society. Now CNN’s Fareed Zakaria presents a fascinating study by a Harvard economics professor on the Arab world’s political reality which shows just that. (See video):

Zakaria: Explaining the Arab World’s Democracy Deficit As Egypt’s election campaign gathers pace, we are seeing the rise of candidates from Islamic parties, one more radical than the next. Across the Arab world, the promise of a new birth of freedom has been followed by a much messier reality.

It raises the question in many people’s minds: Why does it seem that democracy has such a hard time taking root in the Arab world?

As it happens, a Harvard economics professor, Eric Chaney, recently presented a rigorous paper that helps unravel that knot. Chaney asks why there is a “democracy deficit” in the Arab world and systematically tests various hypotheses against the data. He notes that such majority-Muslim nations as Turkey, Indonesia, Albania, Bangladesh and Malaysia have functioning democratic systems, so the mere presence of Islam or Islamic culture cannot be to blame.

He looks at oil-rich states and again finds that some with vast energy reserves, like Saudi Arabia, lack democracy, but so do some without – like Syria. He asks whether Arab culture is the culprit, but this does not provide much clarity. Chaney points out that many countries in the Arab neighborhood seem to share in the democracy deficit – Chad, Iran, Azerbaijan, Tajikistan, Uzbekistan – yet they are not Arab.

Then Chaney constructs a persuasive hypothesis based in ancient history and modern economics. He notes that the democracy deficit today exists in lands that were conquered by Arab armies after the death in A.D. 632 of the Prophet Muhammad.

Lands that the Arabs controlled in the 12th century remain economically stunted today. This correlation is not simply a coincidence. Arab imperial control tended to mean weak civil society and a large role for the state in the economy. Chaney documents the latter, showing that the government’s share of GDP is 7% higher on average among countries that were conquered by Arab armies than among those that were not. He also finds that these countries have fewer trade unions and less access to credit – features of a vibrant civil society.

There are less medieval factors. It has long been apparent that the dictatorships of the Middle East form close alliances with religious leaders to crowd out other leaders and groups. Indonesia, the country with the world’s largest Muslim population had religious parties just as Egypt did. But it also had powerful groups that were less religious, more moderate and entirely secular. All these groups competed for influence on an even footing, something that is not happening in the Arab world.

Chaney’s analysis reminds us that the real problem in a country like Egypt is that the military continues to keep power concentrated, undivided and unchecked. It maintains the central role in the economy. The chief challenge in the Arab world remains to create a vibrant civil society [emphasis added], which means political parties and also a strong, self-sustaining private sector.

The dysfunctions in the Arab world have ancient roots, going back over a thousand years. But this does not mean that the region is impervious to change. History, and the habits it engendered, are democracy’s biggest foes in the Arab world. But as these habits change, things should improve. It is a prescription for the very long term, but at least it is a prescription.